Diesel from seeds to gush from local refineries

The country's first seed oil refinery, which would produce fuel from vegetable oil...

Johannesburg - The country's first seed oil refinery, which would produce fuel from vegetable oil, was to be built near Isando in Johannesburg at a cost of R83,7 million and would be followed by two further refineries in Mpumalanga and in the Western Cape, it was disclosed at the weekend.

Bernd Schmidt, managing director of Seed Oil Refinery South Africa (Sorsa), said the refineries would each produce 60 000 tons of diesel fuel a year for local consumption or export, and create about 4 000 jobs.

The seed oil refineries, which will start commercial production next year, are expected to help decrease South Africa's dependence on imported crude oil.

The seed oil diesel - biodiesel - would retail at an estimated R2,50 a litre, which compares favourably with the subsidised farming cost of diesel, and with that charged at service stations.

Sorsa was drumming up co-operation from the government, institutional lenders like the Industrial Development Corporation (IDC) and leading energy suppliers. While Schmidt would not be drawn into disclosing whether the IDC would be taking a stake in the company, he said Sorsa would consider listing on the venture capital board of the JSE Securities Exchange.

Sorsa intends to hold just 10 percent of the fuel company once it is established, with at least 25 percent of the stock held by a black empowerment group and the balance by institutions or interested stakeholders.

Schmidt said the biodiesel would comply with legislation which comes into force from the beginning of next year compelling fuel companies to reduce the sulphur content in diesel to below 0,3 percent.

The biodiesel, which can be used in any diesel engine or diesel burner mostly without adaptations, was 100 percent pure and, once burnt, would give off no sulphurous contaminants or greenhouse gases.

Sorsa was also seeking to source the supply of jatropha curcass seed for the local refineries and it wanted to contract local farmers to cultivate sufficient seed for crude vegetable oil. Sorsa said the department of agriculture was excited about the opportunities this would give small-scale farmers, with the crop promising a minimum return of three times the value of a sunflower crop.